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- Verizon Media CEO Guru Gowrappan tells Insider the unit is preparing a “mega” product launch in the coming weeks.
- The idea is to serve more personalized content to users on Yahoo Mail and sites like Yahoo News and TechCrunch.
- Verizon Media marked annual revenue growth in the fourth quarter — its first since 2017.
- Visit Business Insider’s homepage for more stories.
Verizon Media is preparing a “mega” product launch in the first quarter of this year that hopes to tie together its tools and websites and serve up more personalized content, the unit’s CEO, Guru Gowrappan, told Insider.
Like other media organizations with a strong digital-advertising business, Verizon Media came out of 2020 in good shape. Verizon this week said the media division had its first quarter of annual revenue growth since it acquired Yahoo in 2017.
The holiday quarter is traditionally the strongest for any ads-based business — and this year it also contained the 2020 US election. The company’s challenge is to maintain that momentum in the traditionally quieter start to the year.
“You’re going to see some big launches coming up in Q1 … probably one of the best, at least since I’ve been the CEO,” Gowrappan said. “One the megalaunches that’ll happen this quarter: personalization and customized experiences.”
While he did not disclose specifics, Gowrappan described a few scenarios that explained how the launch would work. A person landing on the Yahoo.com homepage might be served up a travel guide or swimsuits to buy related to an upcoming vacation they’ve booked. It knows about the trip because the person’s Yahoo Mail account has details of their booking and itinerary (if the user has given consent for details about their incoming “commercial emails” to be shared with Verizon Media.)
They might also see a content card for a stock they follow on Yahoo Finance or the latest sports odds related to their Sportsbook online-betting history. (Google has a similar offering on its homepage, app, and Android phones dubbed Google Discover.)
While the initial launch will focus on Yahoo’s various homepages across news, sports, and finance, Gowrappan said the idea was to extend the personalized content and advertising cards across its properties. Its collection of sites, which includes TechCrunch and Engadget, draw in 900 million monthly active users, according to the company.
There are already some early signs of this strategy in action. Verizon Media recently signed a deal that lets users livestream some NFL games from their Yahoo Mail inboxes. About 500,000 users watched NFL streams in the Yahoo Mail app in tests of the service last quarter, Gowrappan said.
Elsewhere, users can add items to their Walmart shopping carts directly from their inboxes, thanks to a deal signed earlier this year. Similar retailer partnerships are set to be announced soon, Gowrappan added. E-commerce revenue grew 187% in the fourth quarter versus the prior one, though Verizon didn’t provide a dollar amount. (Overall, Verizon Media’s total revenue in the fourth quarter rose 11% to $2.3 billion.)
About $250 billion or $350 billion of US commerce already touches Yahoo Mail, by way of receipts and coupons that retailers email to customers, Gowrappan said.
“The vision for what we are working on in the commerce world is not just content affiliate links but creating a marketplace because we have a logged-in user base,” he added. “We see all this activity and interest, but we don’t convert them — the idea is to close the loop.”
The long, long path to growth
Verizon’s media unit has been a thorn in the company’s side for years, with successive quarters of revenue decline. The unit formed in 2015 after Verizon bought AOL for $4.4 billion in 2015 and added Yahoo’s properties in a $4.5 billion acquisition two years later to create what was then known as “Oath.” That year, then-Oath CEO Tim Armstrong set out on a bold ambition that the unit would reach $10 billion to $20 billion in revenue by 2020.
But in a highly competitive digital-advertising market dominated by Google and Facebook, Oath, which rebranded to Verizon Media Group in 2019, failed to live up to those lofty expectations. Verizon wrote down the value of the unit with a $4.6 billion charge in 2018 and $200 million charge in 2020. Verizon Media is estimated to generate $4.1 billion in revenue in 2021, 1% of the global digital-ad market, according to eMarketer data from Insider Intelligence.
Gowrappan, a former Alibaba exec, has sought to streamline the division’s operations since becoming Verizon Media’s CEO in 2018.
On the adtech side, the unit has pared down a hodgepodge of seven demand-side platform products to just one. Verizon said revenue derived from its demand-side platform grew 41% in the fourth quarter compared with the prior year. A “significant portion” of Verizon Media’s revenue is programmatic advertising, Gowrappan said.
On the content side, Verizon Media offloaded HuffPost to BuzzFeed in November. In addition to the all-stock deal, Verizon invested cash in BuzzFeed for a noncontrolling stake in the company, and the pair’s newsrooms will be able to share content and ad deals. Verizon took a charge of $119 million “primarily related to the disposal of the HuffPost business” in the fourth quarter.
When he was asked if the unloading of HuffPost signaled that Verizon Media was also stepping back from investigative journalism, Gowrappan said the company’s strategy around “trusted content” hadn’t changed. About 80 to 90% of its content comes from third-party publishers, including Insider, Reuters, and The Guardian.
“We rely on deep journalism. That’s core to our values, and employees we have as journalists are amazing. You look at TechCrunch as an example: deep journalism … and the work they do on technology and startups,” Gowrappan said, adding that wasn’t going to change for a while.”
“The model for us is still 80 to 90% partnerships because they do much better,” he said.
It’s unclear whether Verizon Media’s positive momentum at the end of last year will endure into 2021, Will Ryder, an equity analyst at the investment-services firm Hargreaves Lansdown, said.
“There’s still a question of whether the underlying improvements in the platform and offering can drive, if not grow, at least a slowdown in the declining trends it had been seeing and turn that around … to start to contribute meaningfully to the overall group’s revenue and profit growth,” Ryder said. “We would need to see a lot more progress to feel it has been a good thing overall when looked at in aggregate,” he added, referring to the Verizon Media Group business.
Speaking on an earnings call earlier this week, Verizon CEO Hans Vestberg played down a suggestion from an analyst that the company’s media business could be for sale.
“I’m looking for how these guys will execute, and we are now in the position where I wanted it to be,” Vestberg said.
Gowrappan echoed the sentiment in his interview with Insider.
“We are not going out and putting this on a block to sell … if anything we’re investing in creating more value for the Verizon ecosystem,” he said. “Our intent is not to start going shopping around … the asset has started doing really well.”
Disclosure: This reporter worked at Verizon Media’s Yahoo Finance as an executive producer in 2019.
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